ADB Supports Indonesia's Policy Reforms

The Asian Development Bank

MANILA, PHILIPPINES - The Asian Development Bank (ADB) will provide a $200 million loan for the third part of Indonesia’s Development Policy Support Program (DPSP), a series of reforms that supports key priorities of the government’s medium-term growth and poverty reduction program.

The loan builds on the assistance provided by ADB for the previous two parts of DPSP, and complements assistance from the World Bank and the Government of Japan.

DPSP is in line with the government of Indonesia’s Medium-Term National Development Plan 2004-2009. The program series supports the broad goals of the development plan of stimulating higher and sustainable economic growth and progress toward achieving Indonesia’s Millennium Development Goals.

To achieve these goals, the third part of DPSP will support wide-ranging reforms in three core areas – improving the investment climate, strengthening public financial management and anticorruption efforts, and improving public service delivery.

“Despite recent gains, there is still room for improvement. The DPSP series has allowed the country to work with development partners like ADB in a flexible manner to implement critical high-level economic and sector reforms that address constraints to growth and poverty reduction while providing reliable financial support,” said Purnima Rajapakse, Principal Country Specialist of ADB’s Indonesia Resident Mission.

ADB’s involvement in the Development Policy Loan process builds on reforms supported by the Bank’s operations under the Country Strategy and Program 2006-2009 for Indonesia.

Ten years after the Asian financial crisis, Indonesia has become more stable and resilient to internal and external shocks. The concern no longer centers on economic stabilization and recovery but on achieving and sustaining higher rates of economic growth to reduce unemployment and poverty. To achieve these objectives, the government is relying on a pro-growth agenda while pursuing broad structural and institutional reforms.

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